Subrogation and How It Affects YouSubrogation is a term that's understood in legal and insurance circles but sometimes not by the people who employ them. Even if it sounds complicated it is to your advantage to know the nuances of how it works. The more information you have about it the more likely it is that relevant proceedings will work out in your favor.
Any insurance policy you own is a commitment that, if something bad occurs, the business on the other end of the policy will make restitutions in one way or another without unreasonable delay. If your real estate burns down, your property insurance agrees to repay you or facilitate the repairs, subject to state property damage laws.
But since ascertaining who is financially accountable for services or repairs is regularly a confusing affair – and time spent waiting often compounds the damage to the policyholder – insurance companies usually opt to pay up front and figure out the blame after the fact. They then need a way to recoup the costs if, once the situation is fully assessed, they weren't actually responsible for the payout.
Can You Give an Example?
You head to the doctor's office with a gouged finger. You hand the receptionist your medical insurance card and she writes down your policy details. You get stitched up and your insurance company is billed for the tab. But the next day, when you arrive at work – where the injury happened – your boss hands you workers compensation paperwork to file. Your workers comp policy is in fact responsible for the bill, not your medical insurance policy. The latter has a right to recover its money somehow.
How Subrogation Works
This is where subrogation comes in. It is the process that an insurance company uses to claim payment after it has paid for something that should have been paid by some other entity. Some companies have in-house property damage lawyers and personal injury attorneys, or a department dedicated to subrogation; others contract with a law firm. Usually, only you can sue for damages done to your person or property. But under subrogation law, your insurance company is extended some of your rights in exchange for having taken care of the damages. It can go after the money originally due to you, because it has covered the amount already.
Why Should I Care?
For one thing, if your insurance policy stipulated a deductible, your insurance company wasn't the only one that had to pay. In a $10,000 accident with a $1,000 deductible, you lost some money too – namely, $1,000. If your insurance company is lax about bringing subrogation cases to court, it might opt to get back its losses by ballooning your premiums and call it a day. On the other hand, if it has a proficient legal team and pursues those cases enthusiastically, it is doing you a favor as well as itself. If all ten grand is recovered, you will get your full thousand-dollar deductible back. If it recovers half (for instance, in a case where you are found 50 percent culpable), you'll typically get $500 back, depending on the laws in your state.
In addition, if the total cost of an accident is over your maximum coverage amount, you may have had to pay the difference. If your insurance company or its property damage lawyers, such as Criminal defense attorney Hillsboro OR, pursue subrogation and succeeds, it will recover your losses as well as its own.
All insurers are not the same. When comparing, it's worth comparing the records of competing agencies to determine whether they pursue valid subrogation claims; if they do so without delay; if they keep their policyholders apprised as the case goes on; and if they then process successfully won reimbursements right away so that you can get your deductible back and move on with your life. If, on the other hand, an insurer has a reputation of honoring claims that aren't its responsibility and then protecting its bottom line by raising your premiums, even attractive rates won't outweigh the eventual headache.
Criminal defense attorney Hillsboro OR